A progressive voice from the Carolinas, featuring views, news, and dialogue that the corporate media doesn't. In the Mountains of Western North Carolina, Mills River is a rural community about 20 minutes from Asheville.

Sunday, June 06, 2010

Recovery for Whom?

Did you know that more than 40% of the employed are now working in low-wage service jobs? And that real wages have continued to decline? While sales at some retail chains (Target, Home Depot, etc) were showing some modest increases last month, these increases are due to spending by the most affluent consumers -- about 40% of all spending currently comes from the 20% of households with the highest incomes.

Why Wal-Mart's sales should have everyone worried:

"...Overall, while retail sales have continued to expand over the last seven months, the rate of increase has slowed since March. Also, much of the retail rebound has taken place on the shoulders of wealthier consumers -- about 40% of all spending currently comes from the 20% of households with the highest incomes.

That spending, juiced by earlier stock market gains, has led wealthy Americans to spend their savings at an increasing clip (a cause for concern in and of itself). If that isn't worrisome enough, how about the fact that other retail fuel has come from a decidedly different source: Americans walking away from their debt-sopped homes, which has freed them to spend again. You can't build a sustainable consumer-led economy with that kind of material...

That demographic remains large.The unemployment rate still hovers around 10%. Moreover, the rate of under-employment (those whose hours are cut or can only find part-time work) continues to increase, and more than 40% of the employed are now working in what are often low-wage service jobs. These Americans are going to need more than confidence to get moving. They are going to need more work and more money.

So far, they're getting neither. Real wages have continued to decline. Inflation-adjusted personal disposable income has remained relatively flat. And, even if current economic growth were sustained, it would take more than three years to bring the unemployment rate below 6.3%, where it was at the peak of the 2001 recession. Meanwhile, the Mortgage Bankers Association reported yesterday that the number of mortgages in foreclosure has climbed to a new record, with foreclosures and delinquencies now accounting for one out of every seven US mortgages out there..." Read entire piece at CNN Money, here.

“In the councils of government we must guard against
the acquisition of power, whether sought or unsought,
by the military industrial complex.
The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties and democratic processes.”

Dwight D. Eisenhower
from his final address to the nation
January 17, 1961

If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.
--Thomas Jefferson